The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Anavex Life Sciences Corp. (NASDAQ:AVXL).
Is AVXL a good stock to buy? Anavex Life Sciences Corp. (NASDAQ:AVXL) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of the first quarter of 2021. Our calculations also showed that AVXL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Curis, Inc. (NASDAQ:CRIS), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), and Scholastic Corp (NASDAQ:SCHL) to gather more data points.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let's take a peek at the fresh hedge fund action encompassing Anavex Life Sciences Corp. (NASDAQ:AVXL).
Do Hedge Funds Think AVXL Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 7 hedge funds with a bullish position in AVXL a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Anavex Life Sciences Corp. (NASDAQ:AVXL) was held by Marshall Wace LLP, which reported holding $2.7 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $1.5 million position. Other investors bullish on the company included D E Shaw, Citadel Investment Group, and AQR Capital Management. In terms of the portfolio weights assigned to each position Marshall Wace LLP allocated the biggest weight to Anavex Life Sciences Corp. (NASDAQ:AVXL), around 0.01% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to AVXL.
Since Anavex Life Sciences Corp. (NASDAQ:AVXL) has witnessed a decline in interest from hedge fund managers, it's safe to say that there is a sect of fund managers who were dropping their positions entirely last quarter. It's worth mentioning that Joseph Edelman's Perceptive Advisors said goodbye to the largest stake of the "upper crust" of funds watched by Insider Monkey, valued at about $4.2 million in stock, and Fred Knoll's Knoll Capital Management was right behind this move, as the fund dropped about $3.6 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks similar to Anavex Life Sciences Corp. (NASDAQ:AVXL). These stocks are Curis, Inc. (NASDAQ:CRIS), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Scholastic Corp (NASDAQ:SCHL), Vine Energy Inc. (NYSE:VEI), EverQuote, Inc. (NASDAQ:EVER), Veeco Instruments Inc. (NASDAQ:VECO), and SFL Corporation Ltd. (NYSE:SFL). This group of stocks' market caps are closest to AVXL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRIS,29,493218,1 JBSS,10,84672,0 SCHL,9,26175,-2 VEI,16,152344,16 EVER,19,135053,1 VECO,20,381940,1 SFL,14,25172,0 Average,16.7,185511,2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $186 million. That figure was $5 million in AVXL's case. Curis, Inc. (NASDAQ:CRIS) is the most popular stock in this table. On the other hand Scholastic Corp (NASDAQ:SCHL) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Anavex Life Sciences Corp. (NASDAQ:AVXL) is even less popular than SCHL. Our overall hedge fund sentiment score for AVXL is 23.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on AVXL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on AVXL as the stock returned 48.1% since Q1 (through June 18th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.